Review: Education, Demand and Unemployment in Metropolitan America

By Matthew C. Kyle
Since the second quarter of 2009, U.S. GDP has nosed upward—yet unemployment rates haven’t budged. To understand the cause of this discrepancy, Brookings analysts explore the relationship between unemployment rates and educational attainment in America’s largest metro areas, both before and since the Great Recession. (While the researchers collected Census and Bureau of Labor Statistics data for all 366 U.S. metropolitan areas, the report mainly focuses on the largest 100 of these.) Unsurprisingly, analysts found that cities with decently educated workforces boast a lower unemployment rate than those with large “education gaps” (between the average schooling of the workforce living there and the average schooling needed to perform the jobs of the metro area). Madison, WI (home of Wisco), for example, has the lowest education gap of the largest 100 metro areas and only a 5.3 percent unemployment rate. Yet, in Modesto, CA, a city with one of the widest education gaps, the unemployment rate is 16.7 percent. Anyone skeptical of the role education plays in defining a city’s economic viability should take a gander at these pages. And it wouldn’t hurt for recent college graduates on the job hunt (and willing to move) to do the same.

Jonathan Rothwell and Alan Berube, “Education, Demand, and Unemployment in Metropolitan America” (Washington, D.C.: Metropolitan Policy Program at the Brookings Institute), September 2011.